David Cameron is refusing to scrap free television licences, bus passes and
winter fuel payments for middle-class pensioners, despite pressure from his
Cabinet colleagues.

The Prime Minister is facing demands from within the Cabinet to scale back the £100 billion cost of providing benefits for older people, especially the winter fuel payment.

This benefit gives everybody over the age of 60 a cheque for £200 to go towards their winter fuel bills, rising to £300 for the over 80s.

All pensioners get the hand-out, regardless of how rich they are, and it does not have to be spent on gas and electricity.

The payments have attracted criticism from Iain Duncan-Smith, the Work and Pensions Secretary, and officials at the Treasury looking to save money. Some senior Liberal Democrats also believe the payments should be means-tested.

Mr Duncan-Smith has even called on well-off pensioners to send the money back if they do not need it.

“I’d be inclined to send it back," he said earlier this year. "If you honestly think it’s going to pay for your holiday then give it back, because it’s not what it was meant to do.”

He has also described benefits for the wealthy as "an expensive way of giving a bribe".

“I don’t agree with those who say, ‘Unless the middle classes are in the welfare system we’re not all in this together," he said in the interview. "The welfare system is there to support you in times of need and when you get clear of it you should be clear of it. It’s rather daft to take tax off the middle classes and pay them a little bit back

However, Downing Street said the winter fuel allowance is not up for negotiation before 2015, because keeping benefits for pensioners is part of the Conservatives' agreement with the Liberal Democrats.

The Prime Minister's official spokesman said: "He stands by what is in the Coalition Agreement".

Benefits for pensioners are set to become a key battleground at the next election, as Mr Duncan-Smith is pushing for the £100 billion bill for older people to be scaled back in the next parliament.

A spokesman for the Department for Work and Pensions said the Coalition would "continue to support winter fuel payments as they make an important contribution to fuel costs".